Finance Monthly April 2020 Edition

are entitled to tax relief. Some of these benefits include claims for Capital Gains Tax reliefs for traders, entitlement to plant and machinery capital allowances for items such as furniture, equipment and fixtures and profits from your holiday home earnings counting towards pension purposes. Buy-to-let mortgage Buy-to-let (BTL) mortgages are a great investment for those who wish to own a property and rent it out for additional income for long-term tenants rather than as a place to live. The rules around BTLs are similar to among other picturesque holiday hotspots. A holiday home must be available for letting as a furnished holiday home for at least 210 days per year. This leaves a third of the year (22 weeks) for you to enjoy, refurbish or renovate your holiday home. Many holiday home letters choose to keep it on the market all year round, particularly during peak times, and block out weeks to enjoy their own holiday there, which can be a bonus of choosing this mortgage type. Not only this, but holiday homes Choosing a holiday home A holiday home acts as not only a great source of income but is a second home for you and your loved ones. Due to the high turnover of tenants in holiday homes, short stays are the key selling point that attracts visitors to staycations. Due to this, holiday homeowners can expect to earn £22,000 on average per year according to one report, and even more during peak times and in sought-after holiday locations, such as luxury Lake District cottages that are extremely popular among walkers and outdoorsy travellers, THE RISE OF HOLIDAY HOMES vs. BUY-TO-LET MORTGAGES With a rise in staycation tourism, many people looking to top-up their wages or pensions are investing in holiday homes, with the number of people choosing a self-catering holiday in the UK rising from 6.22 million to 7.23 million between 2015 and 2017 alone . With the recent fall in the value of the pound due to Brexit uncertainty and coronavirus panic, the holiday home market is set to increase further in popularity – but why are holiday homes becoming more popular than buy- to-let mortgages? Lakelovers INVESTMENT - HOLIDAY HOMES VS. BUY-TO-LET MORTGAGES 56 www.finance-monthly.com